Reuters story chastises Ohio for secrecy over oil and gas production

Is Ohio's “secret” energy boom going bust?That's the question posed by Reuters in an analysis/investigation of the state's long-term prospects of emerging as an major player in the energy business. “Dozens of wells drilled this year across rural Ohio are quietly pumping out the answer to the U.S. energy industry's most loaded question: Is the Utica shale formation, touted as a potentially US$500 billion frontier, a boom or a bust?,” the news service asks.The answer, though, “is likely to remain concealed for some time.”Reuters says that more than a year after Chesapeake Energy Corp. CEO Aubrey McClendon declared the Utica to be “the biggest thing to hit Ohio since the plow,” investors, landowners and even the federal government “are still in the dark over the true pace of oil and natural gas production in the state.”One reason: “Ohio is one of the nation's least transparent states when it comes to energy data — a distinction the industry worked to maintain this year, according to a review of legislative documents and interviews with state and industry officials.”Reuters says secrecy “still surrounds the most eagerly anticipated drilling campaign in the country, one that began in the middle of last year when McClendon boasted that the 1.3 million acres of land the company had leased could hold oil and gas worth $20 billion. Months later, with drilling into the 8,000-foot-deep (2,500- meter) formation just starting, he said the Utica — centered under Ohio but reaching seven other states and Canada — probably held hydrocarbons worth $500 billion.”By spring, Reuters says, “a new energy bill being crafted by lawmakers initially included a clause that would have allowed regulators to publicly disclose quarterly energy production data.” (The current requirement calls for annual reporting.)However, “the clause was struck from the bill after discussions with the industry, a Reuters investigation has found. Instead the law, which took effect in August, explicitly bars the government from publishing the quarterly figures it now obtains,” according to Reuters.

And then there's this shot: “Almost every other energy-producing state releases production data and drilling results on a monthly basis; even Saudi Arabia now self-reports its once-secret production volumes once a month. The latest Ohio figures for 2011 provide information on only five wells. The volume of oil and gas pumping out of dozens of new wells drilled this year will not be available until April 2013, as much as 15 months after they were drilled.”Reuters adds that in Ohio, “companies control the flow of information, and their selective disclosure is creating doubts about Utica's ultimate bounty. It remains unclear whether the Utica will be a major winner for companies who have invested billions of dollars leasing land and drilling there, and for the state's finances, or if it will turn out to be a relative flop.”

This and that

The start of something big: An “unconventional oil and gas revolution is under way in the United States,” according to this Wall Street Journal op-ed piece, and its full ramifications “are only beginning to be understood.”Daniel Yergin, vice chairman of HIS, a global market information and analytics company, and author of "The Quest: Energy, Security and the Remaking of the Modern World," writes that not long ago “it was assumed that the U.S. would become a large importer of liquefied natural gas; now the domestic natural gas market is oversupplied, thanks to the ability to produce shale gas through hydraulic fracturing and horizontal drilling technologies.”Shale gas alone, he says, is now 10% of the overall U.S. energy supply. Similar technologies to recover so-called tight oil trapped in rock formations “are largely responsible for boosting U.S. oil production by 25% since 2008 — the highest growth in oil output of any country in the world over that time period,” according to Mr. Yergin.The result: 1.7 million jobs, according to a report titled "America's New Energy Future," released today, Oct. 23, by IHS. These jobs “include people working on rigs in Pennsylvania or North Dakota, manufacturing equipment in Ohio or Illinois, and providing information-technology services in California or legal services to royalty owners nationwide,” Mr. Yergin writes.The number of jobs could rise to three million by 2020. The energy revolution will add an estimated $62 billion to federal and state revenues this year, he says.We'll never be Texas:The Akron Beacon Journalreports that Ohio has 23 drilling rigs at work, according to last Friday's count by Baker & Hughes.“That total is the same as the Oct. 12 count and an increase of one rig from the Oct. 5 count,” the newspaper says.By contrast, Pennsylvania has 66 rigs at work and West Virginia has 26, according the weekly count by Baker & Hughes.

Nationwide, there are 1,839 rigs, an increase of four from a week ago, Baker & Hughes says. That total is a decrease of 174 rigs from a year ago, according to the newspaper.Texas is far and away the leader, with 867 rigs. Oklahoma has 189, North Dakota has 179 and Louisiana has 105.Learning environment: The Cleveland Engineering Society on Nov. 8 will host its annual Industrial & Manufacturing Conference, which this year carries the theme “Engineering Solutions to Energy & Environmental Challenges.”The event takes place at LaCentre in Westlake. Click here for information.Roger Saillant, executive director of the Fowler Center for Sustainable Value at Case Western Reserve University, will open the conference with a presentation about the evolution of automotive painting and emissions standards and what they teach us about a long-term sustainable commitment. In addition to Dr. Saillant's presentation, the conference will feature speakers from a variety of companies and organizations, and a lunch keynote presentation by Kristi Tanner, managing director-advanced manufacturing for JobsOhio.Their wish is granted: A Stark County company has received a federal grant to install a solar power system.U.S. Sen. Sherrod Brown announced that a Rural Energy for America Program Grant (REAP) of $140,360 was awarded to Alliance Recycling Center Inc. The grant will allow Alliance Recycling Center to install a 116-kilowatt photovoltaic solar power system that will generate 119,742 kilowatt hours annually.You also can follow me on Twitter for more news about business and Northeast Ohio.

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